4 ways you can reduce your car insurance premium burden

While getting an add-on cover can help, it also adds to the financial burden. Hence, evaluate and take a call based on your needs while opting for add-ons. Here are 4 ways you can reduce car insurance premium.

Key Highlights

With this interlinking, drivers violating traffic rules may have to face a double whammy as penalties for traffic rules violations have already increased due to Motor Vehicle Act amendment

The regulator has set up a working group to examine and recommend linking of the two

New Delhi: Insurance Regulatory and Development Authority (IRDAI) has been making some changes in the motor insurance space. Recently, the insurance regulator has brought new rules and regulations which point towards the need for buying a motor insurance policy.

In fact, IRDAI may soon link the motor insurance premium with traffic violations. The regulator has set up a working group to examine and recommend linking of the two. As per an order issued by IRDAI earlier this week, insurance companies will have to undertake a pilot project in the National Capital Territory (NCT), Delhi to implement the premium escalation formula.

The working group will have to submit its report within two months of the IRDAI order. With this interlinking, drivers violating traffic rules may have to face a double whammy as penalties for traffic rules violations have already increased due to Motor Vehicle Act amendment.

With all these new rules and regulations, car insurance premium burden has increased and here are 4 ways you can reduce it:

1. Online policy shopping: There are several platforms online which not only tell about different car insurance products but, they also let you compare them to choose the most suitable option. However, know that you must buy a policy online only if you know the product well.

Experts suggest that policyholders should know the product well so as to not buy a policy that does not offer them enough coverage. Hence, if you understand the product well, you can buy the policy online from the insurer’s website. Since you will be able to compare different products, you can choose one which offers you maximum cover at minimum cost.

2. No-claim Bonus(NCB): Most policyholders must know that if they do not make small claims for minor accidents in a year under the policy then the insurance companies reward them with a No-Claim Bonus (NCB). While this no-claim bonus varies from company to company, for straight 5 claim-free years, it can go up to 50 per cent.

However, if you make a claim in the middle, this bonus is reset to zero which leads to paying a higher insurance premium all over again. You can reduce your insurance premium burden by driving safely and not making make minor claims.

3. Policy lapse: Pay your insurance premium on time and try to avoid lapsing your policy. Normally, insurance companies inspect the vehicle in case the insurer misses the policy renewal deadline. You must know that sometimes, through this inspection, insurers end up charging a higher premium.

In order to avoid this, you should make sure that you pay your premium on time and also renew the policy timely to prevent lapsing your policy. In fact, some policyholders have even lost their NCB completely because their policy has lapsed for more than 90 days.

4. Add-ons: Policyholders must know that add-ons with a normal insurance cover can help you in case of a crisis and at the same time prevent you from paying a high insurance premium. Popular add-ons such as zero depreciation, engine protection etc. help the policyholders avoid paying a higher premium in the long run. While getting an add-on cover can help, it also adds to the financial burden. Hence, evaluate and take a call based on your needs while opting for add-ons.

4 ways you can reduce your car insurance premium burdenDescription:While getting an add-on cover can help, it also adds to the financial burden. Hence, evaluate and take a call based on your needs while opting for add-ons. Here are 4 ways you can reduce car insurance premium.ET Now Digital